Definition

Dividend payout ratio

Dividends paid as a share of net income — the fraction of the year's profit distributed to owners rather than retained. It is the one P/E driver a filing directly evidences: growth expectations and required returns are market judgments, but the payout is cash the cash-flow statement records.

Formula

Payout ratio = Dividends paid ÷ Net income

Drivers — what actually moves it

Board policy: a declared per-share dividend commits cash regardless of the year's earnings swing.
Earnings level: the denominator — a flat dividend against falling earnings raises the ratio toward unsustainable.
Reinvestment need: what the business must retain to fund growth caps what it can durably pay out.

Where to find it in the filing

Cash-flow statement (financing activities) + income statement. 10-K Item 8 — dividends paid in the financing section; net income on the income statement, same filing.

XBRL concepts Echelon grounds to: PaymentsOfDividendsCommonStock · PaymentsOfDividends · NetIncomeLoss

Sector caveats — where this breaks

Buybacks return capital without touching this ratio — total shareholder yield needs both legs.
A ratio above 100% means paying out more than the year earned — sustainable only briefly, from cash or borrowing.

Drill it in a live lesson Retained earnings P/E ratio Net margin

Educational use only — not investment advice. Figures come from public SEC filings; Echelon teaches you to analyze data, it never recommends buying or selling any security.